Tax-free weekend proposed for Christmas shopping season

Joint committee considers plan to relieve shoppers

AUSTIN (AP) - Texas sales taxes may take a Christmas holiday if lawmakers stick with a proposed state Senate plan.

The Senate voted earlier this week to create a tax-free weekend similar to the one before school starts in August.

The new tax-free holiday would begin the first Friday in December and last through Sunday.

The House has not voted for the measure, so a House-Senate conference committee will decide whether to make it part of the final version of House Bill 3. The bill raises sales and business taxes to pay for cuts in school property taxes.

During the tax-free weekend, shoppers would not pay sales tax on most clothes that cost less than $100 apiece. The Senate proposal extends that tax break to backpacks and some school supplies.

Sen. Eliot Shapleigh, D-El Paso, said he proposed the new break because the sales tax is a regressive tax, meaning low-income families pay a higher share of their income to cover the tax on such basic items as clothes and food.

Comptroller Carole Keeton Strayhorn said the December holiday would save Texans $126 million in sales tax over two years on the exempt items.

The money would normally go to state and local governments, but those entities should be able to recover with taxable expenditures over the holiday.

"We get that economic shot in the arm because while people are out, they buy other things," she said.

Also, she said, the holiday draws shoppers from out of state who spend money at hotels and restaurants.

Local governments, which charge up to 2 cents in sales tax, can decide to charge that tax during the holiday, but Strayhorn said that almost never happens.